The National Bank of Egypt (NBE) is leading an alliance of banks working in the Egyptian market to arrange an increase in financing for Oilex, an Egypt-based international company for the extraction of multiple forms of oils.
The NBE and First Abu Dhabi Bank (FAB) have signed a contract to increase joint finance at a value of EGP 2bn in Oilex’s favour. The alliance also includes Banque du Caire, Arab Bank, Suez Canal Bank (SCB), Al Baraka Bank, and Emirates NBD.
Egypt’s Minister of Trade and Industry Nevine Gamea witnessed the signing of the deal, one of the Egyptian banking apparatus’ most important financing deals for the industrial sector.
Gamea said that the NBE alliance to finance working capital for the project of extracting, refining and packing vegetable oils and their products reflects the banking sector’s keenness to support the Egyptian economy in general. It also focuses on supporting the industrial sector in particular, whilst confirming its confidence in the project’s significant economic viability.
NBE Chairperson Hisham Okasha said that the deal greatly reflects the confidence of local financing institutions in the economic viability of such projects. This comes with a particular focus aimed at deepening the industry and creating imports.
Okasha added that the financing comes in light of Central Bank of Egypt (CBE) initiatives to support Egypt’s industrial sector, and provide financing needs in various economic sectors.
NBE Vice-Chairperson Yehia Aboul Fotouh said that the alliance holds a prominent role in providing the necessary funds to implement many major projects. This occurs in a way that has strengthened the capabilities of those projects, and enabled them to achieve a major leap in production.
Sherif Riad, Head of the NBE’s corporate finance and joint loans group, said that the financing aims to increase the working capital financing.
This will allow for the highest production capacity at the Integrated Industrial Complex to extract oil from the multiple seeds owned by Oilex, which is estimated at 4,200 tonnes/day. The company targets a production capacity of 1.5m tonnes annually.
Riad said that the construction of the integrated industrial complex had previously been given funds of EGP 2.4bn, representing 61% of the investment cost. This is considered the largest investment in this field in the Middle East and Africa (MEA) region.
He added that the financing period covers seven years, and includes the disbursement and grace periods. The total financing granted by all participating banks for the project, including this financing, has reached a total of EGP 4.4bn, of which the NBE will contribute EGP 1.6bn.
Additionally to this: FAB has contributed EGP 680m; Banque du Caire has contributed EGP 670m; the Arab Bank has contributed EGP 600m; the SCB has contributed EGP 367m; Al Baraka Bank has contributed EGP 200m; and Emirates NBD has contributed EGP 200m.
Oilex Chairperson Sherif Ziada said that the main objective of establishing the project is to enhance industrial integration and local and international competition. It also aims to provide products that have been manufactured according to the highest international standards and at the lowest cost within the Egyptian and Arab market, in support of the national economy.
He said that the project accommodates thousands of direct and indirect job opportunities while striving to reduce the volume of imports of edible oils.